Company Contact: Investor Contact:
Richard D. Falcone, CFO Joseph M. Zappulla
[TACT LOGO] TACT Wall Street Investor Relations
732-499-8228 212-681-4100
rfalcone@tact.com jzappulla@wallstreetir.com
THE A CONSULTING TEAM REPORTS SECOND QUARTER FINANCIAL RESULTS
NEW YORK, NEW YORK, AUGUST 10, 2005 - THE A CONSULTING TEAM, INC. ('TACT')
(NASDAQ SMALLCAP: TACX), AN IT AND BUSINESS PROCESS OUTSOURCING (BPO) SERVICES
PROVIDER TO FORTUNE 1000 COMPANIES, TODAY REPORTED FINANCIAL RESULTS FOR ITS
SECOND QUARTER ENDED JUNE 30, 2005. THE COMPANY REPORTED REVENUE OF $6.7
MILLION, AN INCREASE OF $357,000 OR 5.6 PERCENT OVER THE SECOND QUARTER OF THE
PREVIOUS YEAR AND REPRESENTS A 9.6 PERCENT INCREASE OVER THE FIRST QUARTER OF
2005. THE COMPANY REPORTED A NET LOSS OF $(546,000) OR $(0.24) PER SHARE, WHICH
INCLUDES PRETAX CHARGES OF $617,000 OF COSTS RELATED TO THE PROPOSED BUSINESS
COMBINATION WITH VANGUARD INFO-SOLUTIONS CORPORATION ("VANGUARD"). THIS COMPARES
TO NET EARNINGS OF $298,000 OR $0.14 PER SHARE IN THE SECOND QUARTER OF 2004 AND
A NET LOSS OF $(259,000) OR $(0.12) PER SHARE IN THE FIRST QUARTER OF THE
CURRENT YEAR, WHICH INCLUDED PRETAX CHARGES OF $545,000 OF COSTS RELATED TO SUCH
PROPOSED BUSINESS COMBINATION, WHICH TACT RECENTLY TERMINATED.
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(In 000s except per share amounts) THREE MONTHS ENDED SIX MONTHS ENDED
- ---------------------------------------- -------------- ------------- ------------- ------------- -------------
3-31-05 6-30-05 6-30-04 6-30-05 6-30-04
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REVENUE $ 6,115 $ 6,704 $ 6,347 $ 12,819 $ 12,148
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GROSS PROFIT $ 1,875 $ 1,782 $ 1,907 $ 3,658 $ 3,589
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INCOME/(LOSS) FROM OPERATIONS $ (257) $ (543) $ 337 $ (800) $ 611
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NET INCOME (LOSS) $ (259) $ (546) $ 298 $ (805) $ 518
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EPS PER BASIC SHARE $ (0.12) $ (0.24) $ 0.14 $ (0.37) $ 0.24
- ---------------------------------------- -------------- ------------- ------------- ------------- -------------
The Company's gross margin was 26.6 percent during the second quarter, compared
to 30.7 percent in the previous quarter and 30 percent in the second quarter of
2004. The margin decreased as a result of costs for additional technical and
support staff, which are scheduled to start work on new projects.
Shmuel BenTov, TACT's chairman and CEO, commented, "Over the last two quarters,
costs associated with the proposed business combination with Vanguard has
resulted in TACT breaking its string of consecutive profitability.
Operationally, TACT has delivered continuous positive results. Further
highlighting our progress is the sequential and year-over-year quarter to
quarter revenue growth." Mr. BenTov continued, "On August 4, 2005 our Board of
Directors voted to terminate the proposed transactions with Vanguard
Info-Solutions Corporation and Oak Finance Investments Limited, as we felt this
was in the best interest of our shareholders, employees and clients."
"TACT continues to be financially strong with a current ratio of 2.46 and a
tangible book value of $1.98, with no long term debt," added Richard Falcone,
TACT's CFO. "Once costs associated with the terminated transactions are
concluded, we expect to return to profitability in future quarters."
TACT has scheduled a conference call to discuss its quarterly results at 4:15pm
on Wednesday, August 17, 2005. The call in number for the conference call will
be 800-263-9160, the reservation number will be 21257920. The call will be
available via the internet at www.fulldisclosure.com. A replay of the conference
call in its entirety will be available for 24 hours approximately two hours
after its completion by dialing 800-633-8284 and entering the confirmation
number listed above and through CCNB.
ABOUT TACT
TACT (Nasdaq SmallCap:TACX) is an end-to-end IT and Business Process Outsourcing
(BPO) services provider to Fortune 1000 companies, and other large
organizations. TACT through its SMART Approach, a leading edge set of end-to-end
solutions and services that include Strategy, Methodology, Architecture,
Resources and Tools provides its clients with modernization and development
services, which include systems that should be replaced and rewritten, enhanced,
converted or Web Enabled. More information about TACT(R) can be found at its web
site at http://www.tact.com
"Safe Harbor" Statements under the Private Securities Litigation Reform Act of
1995: Statements made in this press release which are not historical facts,
including those that refer to TACT plans, beliefs and intentions, are
"forward-looking statements" that involve risks and uncertainties. These risks
and uncertainties could cause actual results to differ materially from the
forward-looking statements, and include, but are not limited to, TACT's ability
to scale its existing and any new businesses. For a more complete description of
the risks that apply to TACT's business, please refer to the Company's filings
with the Securities and Exchange Commission. The Company's actual results may
differ materially from the results anticipated in these forward-looking
statements as a result of certain factors set forth under Risk Factors and
elsewhere in the Company's Annual Report on Form 10-K with the Securities and
Exchange Commission on March 25, 2005
* * * * * Financial Statement Follow * * * * *
THE A CONSULTING TEAM, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, DECEMBER 31,
2005 2004
----------------------------------
(UNAUDITED)
ASSETS
Current Assets:
Cash and cash equivalents $1,045,209 $2,493,104
Accounts receivable 4,576,742 3,810,759
Other current assets 514,739 399,704
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Total Current Assets 6,136,690 6,703,567
Investment at cost 337,059 87,059
Property and equipment, net 512,899 556,896
Intangibles and Goodwill, net 1,140,964 1,175,631
Deposits 120,363 126,363
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Total Assets $8,247,974 $8,649,516
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $2,492,119 $2,213,139
Other liabilities 6,218 13,479
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Total liabilities 2,498,337 2,226,618
Total shareholders' equity 5,749,637 6,422,898
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Total liabilities and shareholders' equity $8,247,974 $8,649,516
========== ==========
THE A CONSULTING TEAM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------- -----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenues $ 12,819,166 $ 12,148,284 $ 6,704,056 $ 6,347,212
Cost of revenues 9,161,623 8,559,354 4,921,344 4,439,925
------------ ------------ ------------ ------------
Gross profit 3,657,543 3,588,930 1,782,712 1,907,287
28.53% 29.54% 26.59% 30.05%
Operating expenses:
Selling, general & administrative 4,336,285 2,751,329 2,264,874 1,464,526
Depreciation & amortization 121,464 226,531 61,274 106,256
------------ ------------ ------------ ------------
4,457,749 2,977,860 2,326,148 1,570,782
------------ ------------ ------------ ------------
Income (loss) from operations (800,206) 611,070 (543,436) 336,505
Other income(expense):
Interest expense, net 5,635 (13,512) 2,188 (9,776)
------------ ------------ ------------ ------------
Income (loss) before income taxes (794,571) 597,558 (541,248) 326,729
Provision (Benefit) for income taxes 10,296 80,043 4,375 29,137
------------ ------------ ------------ ------------
Net income (loss) $ (804,867) $ 517,515 $ (545,623) $ 297,592
============ ============ ============ ============
Net income (loss) earning per share:
Basic $ (0.37) $ 0.24 $ (0.24) $ 0.14
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Diluted $ (0.37) $ 0.22 $ (0.24) $ 0.13
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